Wednesday, October 7, 2009

Friday, October 2, 2009

Singtel Starhub EPL Prisoner's Dilemma

In business, competition is suppose to bring down prices, right?

Well, not so in this case.

You might have read that Singtel won the bidding war to broadcast EPL matches for the next three years until 2013. In 2007, Starhub paid $250 million for the rights. This time, Singtel paid more than that, obviously.

This competition actually made the consumers worse off. So don't be surprised if you see sports channel getting charged more in the future.

This is also a classic case of Prisoner's Dilemma at work. The basic premise is, if the two parties just look to benefit themselves, they are actually made worse off in the end.

If you've studied Economics, you'll know the standard answer to solving this problem, and come up with a win-win situation for both.

There's a simple win-win solution to this. It's not to have the bidding war and have one of the party pay the other for not entering the bidding war. In this collaborative mode, Singtel can just bid the minimum amount and share the savings with Starhub. For example, Singtel can just bid $200m and maybe pass $50m to Starhub. Both of them can plaster their logos all over the TV. If the minimum sum is even lower, both can save even more. In this example I didn't take account into the potential earnings they can receive from the coverage, which can actually be greater than the savings, in which case, then they should bid anyway.

Of course, business isn't so simple, and people behave as if they don't know Economics in real life. So the consumers are the ones who are really paying for the bids in the end.

Prime Minister Lee on those who serve NS at 30, 40 and 50.

Serving NS at 30

"If we make it a requirement, we would not get the people we wanted. Secondly, if they did serve NS at 30, 40 or 50 years old, I would not like to be their platoon commander." - Prime Minister Lee Hsien Long

Source: They are spice in the S'pore mix (

- PM Lee “would not like” to be your platoon commander if you’re 30, 40, 50 years old (
- Ungrateful Platoon Commander, Insensitive Leeder

If you read the response of the online community, you'll understand exactly why PM Lee would not like to be their platoon commander. Just look at all the negative comments and complaints. In this case, he probably won't want to be their platoon commander regardless of their age.

Anyone who has served NS, especially those reservist units, will know the attitude of older soldiers. They have other commitments in life other than NS so the lack of focus on serving NS is only natural, hence the difficulty being their platoon commander.